Mortgages as Options

Mortgages as Options

An option contract provides the contract holder the option to force the contract writer to either buy or sell a particular asset at a given price. A typical option contract has an expiration date, and if the contract holder does not exercise their contract rights by a given date, they lose their contractual right to do so. An option giving the holder the right to buy is a “call” option, and the option giving the holder the right to sell is a “put” option. The writer of an options contract is typically paid a fee or a premium for taking on the risk that prices may move against their position and the contract holder may exercise their right. The holder of an options contract willingly pays this premium to limit their losses to the premium paid if the investment does not go as planned. Most options expire worthless.

Mortgages took on the characteristics of options contracts in the Great Housing Bubble. Speculators utilized 100% financing and Option ARMs with low teaser rates to minimize the acquisition and holding costs of a particular property. The small amount they were paying was the “call premium” they were providing the lender. If prices went up, the speculator got to keep all the gains from appreciation, and if prices went down, the speculator could simply walk away from the mortgage and only lose the cost of the payments made, particularly when this debt was a non-recourse, purchase-money mortgage. Another method speculators and homeowners alike used was the “put” option refinance. Late in the bubble when prices were near their peak, many homeowners refinanced their properties and took out 100% of the equity in their homes. In the process, they were buying a “put” from the lender: if prices went down (which they did,) they already had the sales proceeds as if they had actually sold the property at the peak; if prices went up, they got to keep those profits as well. The only price for this “put” option was the small increase in monthly payments they had to make on the large sum they refinanced. If fact, on a relative cost basis, the premium charged to these speculators and homeowners was a small fraction of the premiums similar options cost on stocks. Of course, mortgages are not option contracts, and lenders did not view themselves as selling option premiums to profit from the premium payments; however, speculators certainly did view mortgages in this manner and treated them accordingly.

Today’s featured property exercised her “put” option she obtained from her lender in December 2006 with a “strike price” of $645,000. This was a far better deal than selling the property. If she had sold it, she would not have probably obtained this price, and she would have had to give 6% of that money to a realtor. By getting a lender to give her 100% of this money, she comes out at least $38,700 ahead, and probably more than that when you consider the discount to move the property. It is a wonder more people did not do this.



It appears as if she made two payments before stopping. I guess the intent to defraud is not quite so obvious if you make a token effort at payment? The notice of default was served in July for back payments of $19,943, and the property was purchased by the lender at auction on 1/11/2008 for $691.227. The additional $46,227 being lost payments and expenses.

4 Moss Glen Kitchen

Asking Price: $574,900IrvineRenter

Income Requirement: $143,725

Downpayment Needed: $114,980

Monthly Equity Burn: $4,790

Purchase Price: $529,000

Purchase Date: 9/23/2003

Address: 4 Moss Glen #13, Irvine, CA 92603


Beds: 2
Baths: 2
Sq. Ft.: 1,831
$/Sq. Ft.: $314
Lot Size:
Type: Condominium
Style: Contemporary
Year Built: 1977
Stories: Two Levels
View(s): Park or Green Belt
Area: Turtle Rock
County: Orange
MLS#: P625557
Status: Active
On Redfin: 3 days

Townhouse style condo, 2 attached garage with direct access to the unit. Fireplace in living room with sliding glass door to patio. Light & bright, vaulted ceilings & skylights. 2 balconies upstairs, with view of greenbelt. Spa tub in master bath.



This property is one of the few stressed properties I have seen in Turtle Rock. A healthy market would absorb a few of these without much damage, but in a stressed market like ours practically devoid of buyers, a few of these properties set the comps, and values take a serious dive. Our market is as fragile as an egg, and these foreclosures are as violent as a sledge hammer.

This property is the tale of two parties. The lady who “put” this property to the lender made $116,000 on the deal. She will have to deal with bad credit, and if she has any of this money in liquid assets, the lender may go after it, but in all likelihood, she will get to keep her “profits” from the foreclosure. The lender will not do quite so well on the deal. Their basis is $691.227 plus whatever expenses they incur managing the property through disposition. If they manage to get this selling price and pay a 6% commission, the lender stands to lose $150,821. Let that one sink in for a moment. This lender made a loan, received two payments, and then proceeded to lose $150,000.

The “put” and “call” option features of mortgages during the bubble are the direct result of 100% financing. Speculators and homeowners have too little to lose to behave responsibly when 100% financing is available. Without increasing the cost to speculators through downpayments or a loan-to-value limit on refinances, speculators are going to utilize these mortgage products in ways they were not intended. There were many expensive lessons learned by lenders concerning 100% financing during the Great Housing Bubble.


Wanna be’s throwin’ ones tryin’ to show that they makin cash

Lookin’ stupid than a mother all though it’ll raise ya tabs

Cause the vehicles and jewelry we got is way mo’ advanced

There’s more colors in a watch than a set of jamaican flags

Pick it all up in bags the promoters like make it fast

Cause here comes another monsoon and these boys is goin’ make it last

Y’all hit the club tryin’ to act like ya poppin’ tags

Hit the club and ya new clothes and you know you goin’ take it back

I’m a fly rides owner ain’t no need to take a cab

Cause the key ain’t nothin’ to me I got cars so just take the slab

Say you doin’ it bigger it trip us so they can laugh

Cause I done ran threw way mo’ numbers than student’s can do in math

40 large in my pocket’s is causin’ my pants to sag

Still in love with my money like I use to say in the past

Got a Lot of Options — Chamillionaire


79 thoughts on “Mortgages as Options

  1. Hmmmm


    I don’t understand the numbers at all on this. If the purchase price was $529k how did you get a loss of $150k? The asking price is not even below purchase price yet? I know I have missed something but I can’t figure out where.

  2. IrvineRenter

    The owner who was foreclosed on paid $529K, and “put” it to the bank for $645K in the refi. The bank then added another $50K in fees and lost interest bringing their basis up to $691K. It is the bank that stands to lose $150K on the final sale. The original owner made $116K by taking the refi money and walking away.

  3. AZDavidPhx

    Not a bad deal.

    116K for doing nothing other than being a worthless trouser stain on society.

    In other countries, people like this would be tossed in jail and the key thrown away.

    In America, we praise these people as genius “opportunists” and give them the citizen of the year award.

  4. Masterofdamoney

    IR, have you used Steve Miller yet? Appropriate in this case.

    BTW – The reason they made EXACTLY 2 payments before defaulting is to avoid a ‘first payment default’ which is a special category of mortgage fraud (that the bank and federal authorities would come down like a hammer on). Also, it indicates that the lending institution or broker was in on the scam perhaps… since they are the ones who get hammered hard on early payment defaults!

    This heres a story about billy joe and bobbie sue
    Two young lovers with nothin better to do
    Than sit around the house, get high, and watch the tube
    And here is what happened when they decided to cut loose

    They headed down to, ooh, old el paso
    Thats where they ran into a great big hassle
    Billy joe shot a man while robbing his castle
    Bobbie sue took the money and run

    Go on take the money and run
    Go on take the money and run
    Go on take the money and run
    Go on take the money and run

    Billy mack is a detective down in texas
    You know he knows just exactly what the facts is
    He aint gonna let those two escape justice
    He makes his livin off of the peoples taxes

    Bobbie sue, whoa, whoa, she slipped away
    Billy joe caught up to her the very next day
    They got the money, hey
    You know they got away
    They headed down south and theyre still running today
    Singin go on take the money and run

    Go on take the money and run
    Go on take the money and run
    Go on take the money and run
    Go on take the money and run
    Go on take the money and run
    Go on take the money and run
    Go on take the money and run

  5. George8

    In Florida’s water front McMansion, many home owners did just that, sold put to the lenders near the top, made two payments and stopped paying since. Guess what, many of these owners are still staying and enjoying the glorious residences for free because the lenders are afraid of taking back the properties…. court dates are many months in queue, more foreclosure will depress property value further, and no one would take care of the inside etc……

    These Florida owners who sold puts at the top to lenders are the ultimate winners.

  6. zornundo

    That is one ugly pos condo. And the HOA? Wowsers!! Mr Joe Blow refinancing dude at the lender probably made it ok. Why aren’t stockholders stringing up the management at these companies and shooting them?

  7. Flyovercountry

    The sad thing is that a lot of these people really will get away with the rip offs. Credit will be tough for a couple years, but there are going to be so many people with foreclosures and short sales on their credit records in a few years. Banks will see that pool of borrowers as an untapped market, and will start loaning to them again. Sure, the borrowers will pay a higher interest rate, but not $100k more. And after a few years of that credit record under their belt, they’ll be “prime” borrowers again.

  8. CapitalismWorks

    I can’t argue today. 100% financing virtually guarantees this type of scenario. All the incentives provided by a reasonable down payment are lost.

  9. zoiks

    Well, Irvine MLS inventory has crossed the 1,000 level. (1013 SFR + condo + multi-unit).

    Who’s going to pass out the party favors? Someone should arrange the keg and the stripper.

    Ipoop can wear the dunce cap that says “6 months of inventory”, with a little purple pompom stuck at the top.

  10. AlphaM

    $472 / Month HOA = $5665 / year in HOAs!? Jesus. Who’s going to jump on that hand grenade?

    These kinds of legalized scams – urgh… shocking people would do such things in this day and age, in America. I mean, its just hundreds of thousands of dollars in free money with no repercussions in a society that rewards this kind of behavior. The nerve.

    I must say, it beats trying to be the winner of Fear Factor…

  11. Surfing in Newport

    There’s been a lot of posting about how walking away from your mortgage will only hurt your credit score for a few years. Remember that the whole idea of credit scores is to predict future behavior based on past behavior. If it’s possible for a computer program to determine that this type of behavior was present, then they might be in for a little surprise. Let me see, default after only a couple of payments, but credit cards stay current…hmm, what’s the risk that this behavior will happen in the future? Just because this type of behavior doesn’t hurt your FICO score for very long now, doesn’t mean that it will stay that way. Think of this being the opposite reaction to seeing more bankruptcies caused by medical bills.

    With respect to this particular property, it should be noted that 1800 sq. ft rents are about $3,000/mo and falling. That 2 bedroom rents (~1200 sq. ft) are now around $1,800/mo. The bank will be lucky to see the original purchase price on this property.

  12. ipoplaya

    “has crossed” the 1000 level? Crack-smokin’ zoiky…

    Irvine inventory is the same as it was on January 29th, 2008, i.e. it hasn’t grown over the past month and a half during a time of year when it most usually grows…

    Irvine inventory is also essentially the same as it was on March 18, 2007. Yup, 2007… Year-over-year and in spite of the impact of the credit crunch, Irvine has the same amount of inventory.

    Hum, Lansner’s buddy thinks we have eight months of inventory county-wide. Zoiky thinks Irvine is worse than the rest of the county with 10 months:

    Need more data, here’s a graph of months inventory for all of OC per the source that Lansner usually sites:

    Notice the marked reduction in market time since the 1st of the year. We’re back at about Spring 2007 levels right now.

  13. Kelly

    I remember during the bubble hearing about people buying properties and putting them in LLCs. I am sure that many these LLCs will not take the losses – they owners let properties fall in foreclosure.

    Question – Does the LLC protect the investor from any hit to their credit scores? At the worst, the average person will have their credit scores hit – what happens to the LLCs? Anything?

    Thanks in advance.

  14. 7

    No expert, but my understanding is that the LLC will buffer the owner(s) from the responsibility.

  15. Mike in Irvine

    i see an uptick in the sales volume for Feb and March. Some houses were sold within a week. a couple were relisted and sold immediately after 3-5% reductions. I am interested in finding out the final sale price of some properties, can i email you on the email listed on your website?

  16. ET

    I have to wonder if she ever had any intention on making further payments. Considering she only made 2 payments, this seems more like theft to me.

  17. buster

    This seller / defaulter / refinancer is a genius. Oh, put a foreclosure on my credit for $116,000 in tax free cash. So sorry. Where do I sign up for that gig?

    Hey, the lender was stupid. And stupidity has a price, in this case $150,000 plus. Of course a borrower has an obligation to repay. But the lender has the greater obligation to make sure they get repaid. It’s their money, and if they failed to do their due diligence then they are the fool and deserve to get taken. “A fool and his money” as the saying goes.

    Besides, the TRUE bagholder is probably some Chinese billionaire. Yeah, I feel sorry for them. This loss represents a couple hundred thousand toxic Chinese trinkets that won’t be able to make their way to the hands of US children — too bad.

  18. Stilldoubtful

    Are short sales a joke?

    I have put offers on 2 homes, it has been about 45 days and I have not heard any feedback. The listing agent says they haven’t heard back anything. He said he has other properties where it has been 90 days and no answer from the bank.

    I think it is better to buy a bank owned REO property. Atleast you know if you will be getting the house within 2-5 days.

    I read on the blog a while back that lenders agree to short sales only to keep receiving payments from the home owners. Their ultimate goal is to drag it out as much as possible then it will go into foreclosure.

    Any way to speed up a short sale?

  19. American-Screamer

    Isn’t it possible that with the recent Fed move to exchange bonds for MBS, that it will be the tax payers who will utimately lose that “$150K”?

  20. 7

    We probably pay the price more than anyone. With higher tax, higher interest, and higher inflation.

  21. Hmmmmm

    Short sales are a joke. They exist to allow the bank to drag out the process and get more payments from the seller. They almost never come back in a timely manner and almost never approve the offer.

    REO’s are faster b/c no one is paying the bank anymore and it’s time for them to move it on.

  22. camsavem

    I have looked a few short sales myself and havent even bothered to put in offers. The listing agents have no clue what is going on and neither do the banks. Everyone is still on the Kool-Aid and thinking the recovery is “just around the corner”.

    Unfortunately they will chase the market down for the next few years…….

  23. IrvineRenter

    If the bank made the loan without a personal guarantee from the buyer, then the buyers credit score would not be effected; however, no lender would do this unless the LLC has a long history of being in business and it has its own credit rating.

  24. ipoplaya

    Forget shorts still. They are a pain and require some serious patience. Ran into a realtor in my area this weekend that has a short listing. He has presented 10 offers to the bank, a couple of them within $15-20K of the price they said they would take, and they have refused every one. He’s given them all the comps, which to any local person, substantiate the offered prices. Unfortunately, they are back East, don’t know the area, and rely on whatever their in-house analysts appear to derive.

    Just wait until the property goes back to the lender. It’ll be much easier to get them…

  25. Mr Vincent

    Maybe I am showing my age here, since this townhome was built when I graduated highschool, but I really like it.

    Two beds and plenty of sq footage plus attached garage and a park-like setting.

    Only problem is the assoc dues, but maybe they include things like AC and Water Heater maintenance and earthquake insurance??

    If this was walking distance to stores and a downtown area it would make a perfect retirement home.

    I would easily pay 400k for it.

  26. skek

    Tomorrow’s poll should follow up on this one. For how much money would you sacrifice your credit?

  27. mark

    I’ve heard the Irvine Co. is already loosening standards for renters with recent foreclosures. The population is just too big to ignore and not accept money from.

  28. ice weasel

    It’s all a game. Morality is for suckers. And while that attitude disgusts me personally believing anything else is living in an alternate reality. While you’re doing the “right” thing, 5,000 other people are screwing you to the ground doing the thing that’s not explicitly illegal…yet. The only losers in the game are the ones that are left standing when the music stops or the ones who get caught sitting down early. That’s the only rule, don’t get caught.

    Capitalism works, as the saying goes, but it doesn’t encourage fair play or morality. If you believe anything else I would gently and as respectfully as possible suggest that you’re not paying attention.

  29. skek

    LLCs are limited liability vehicles, meaning that the legal and financial liabilities they incur are generally confined to the entity, not its “owners” (called members). There are instances when you can “pierce the corporate” veil and go after the members, such as fraud. IR is right, though, most banks won’t lend to an LLC (or any other type of corporate entity) without a personal guarantee or substantial capitalization.

  30. Irvinewanabe


    Take a look at Put in the 92603 zip code and you will see 80 properties with various defaults (tax lien/pre-foreclosure/foreclosure). That zip code includes Turtle Rock, Turtle Ridge, Quail Hill, and Shady Canyon. I think is is merely the calm before the storm.

  31. skek

    I don’t disagree with you in practice, but I don’t think many people look to an economic system for guidance on morality. For many, morality is something that comes from within. An internal moral compass, if you will.

    On the external side, when a society comes together with shared values, it attempts to memorialize those values in law and custom. Sadly, our society has been systematically removing morality from the public life — leading to some of the results you describe. Today, if something is not expressly illegal there is little social consequence to doing it, no matter how immoral it may be. Gaming the system is looked upon as a sign of cleverness, as a virtue.

    By the way, there is a difference between religion and morality, so I’m not talking about legislating religious dogma. Although, as public virtues erode, religious and family virtues become more important. When all erode at the same time, watch out!

  32. skek

    I’d love to see an IHB post detailing the foreclosure situation at the high end — particularly Shady Canyon. I’ve never thought there was enough intrinsic value there to justify the peak prices. It would be informative to read about what’s happening now.

  33. Surfing in Newport

    You can search the MLS through the ReMax site. Use the advance search option. The other source that I use is craigslist. It looks as if the IAC is using craigslist more than the MLS right now. It could be because they think that they could quote the same apartment at two different prices. Higher price for those that walk in and a lower price for those that call based on the craiglist.

  34. Surfing in Newport

    On the other hand, the WTF neighborhood of Harbor View Homes has inventory approaching 30 months. During the past 2 weeks ~6 homes were listed. In the past 2-3 months only 2 have gone into escrow. How’s that saying go, “Doo-doo rolls downhill”. That hill is Turtle Ridge, and it’s just starting to roll.

  35. jhill

    Uh, 300K was roughly the 1988 price. Surely not even the most bearish poster thinks those days are coming back. I also thought this was a very nice condo, and if association fees bear any relationship to amenities and services of complex, probably very livable. I couldn’t afford it but half a mill wouldn’t surprise me.

  36. buster

    I’m not sure that getting some dumbass lender to give you $116,000 because you said, “yeah, yeah, I promise to pay you back” is quite the same as rape and murder. Are you sure your not a tad envious that they got away with it and you didn’t?

  37. buster

    If your credit’s already for shit, what’s difference. There’s an old saying, “You can’t kill yourself jumping out of a basement window.” Likewise, if your credit’s a mess, who really cares. It’s like one more booger on the bottom of an elementary school desk.

  38. Surfing in Newport

    I bought a 3 bedroom 2100 sq ft town home with a view of Catalina in Corona Del Mar around this time (maybe 1987) for $270K. If they paid 300K in 1988 for this, it wasn’t a very good deal.

  39. zoiks

    “I’m seeing an uptick…”

    Where the heck do you people get this information? The clowns, ahem, I mean “nice folks” over at claim February volume is down quite a bit from both January and December.

    Fine, ipoopREshill, let me know where your numbers come from. You’re all hooked up and all with the MLS, so get the following numbers for me: 1) closed sales from MLS listings, for the month of February, for existing condos and SFRs. 2) Current inventory of existing condos and SFRs in the MLS (or the inventory at the end of Feb, if you like).

    No guesses, just official stats. That will prevent the flying around of bogus numbers. Should be quit easy, what with all that newfangled high-tech pentiums and such and database technology.

  40. Major Schadenfreude

    “Besides, the TRUE bagholder is probably some Chinese billionaire”

    Actually, the bagholders are probably factory workers who placed their newly and hard earned paychecks in a bank for safe keeping and future use. The bank official who is paid a lot less than his Amercan counterpart was easily bribed to buy the crappy MBS’s.

  41. zornundo

    “There’s an old saying, “You can’t kill yourself jumping out of a basement window.” ”

    ROFL!! You made my day, thanks!

  42. ipoplaya

    I have no access to MLS zoiky… The inventory numbers for Irvine I mentioned are from the graph that the IHB is linked to. Look at the top left of the main blog page and check it out for yourself. I believe zovall said its from ziprealty.

    The other references I made are from Lansner site and info from some RE/Max guy. Feel free to blast him for his data. I didn’t make it up, just repeated it here…

    The DQ numbers for February will be out soon enough. I expect Irvine sales to be north of 150 units for February. Considering there are quite a few properties in escrow already, sales volume at that level and 1000 units in Irvine will be nowhere near your imaginary 10-month figure.

    You can look at this as well:

    Notice how flat the inventory growth has been for the past month and a half. Seems to correspond well with the fact that list prices haven’t been coming down much either… It seems obvious that some increase in sales activity is occurring to me.

    Maybe you can’t afford to buy at these prices, but it appears that some people can. They are probably seriously stupid for it, but they are doing it nonetheless.

  43. IrvineRenter

    The entire secondary mortgage market is a giant shell game, and it is often difficult to determine who is left with the bad debt. Foreign investors have a great deal of it, and the reference was to the enormous amount of American debt held by the Chinese.

  44. CapitalismWorks

    judging by the write-downs on Wall Street I would surmise that a heck of a lot more of this stuff was kept on-shore. The theory that the losses be passed off to the hordes of overseas investors seem increasingly inaccurate.

  45. ConsiderAgain

    ice weasel

    You appear to be pretty much spot-on. See yesterday’s surprising poll results. Where’s the book that teaches how not to play by the rules?

  46. Genius

    Yeah, I’m envious that I’m not a criminal. Die in a fire please.

    If you think the only party damaged here is the lender then you are sorely mistaken.

  47. Genius

    And $270k was the 1994 price… which was a rip-off for the time if you ask me. $300k for 1988 sounds fishy.

  48. 7

    I was under the impression that the foreign countries like China/Japan/Korea/Taiwan/Israel buy US T bills, and other government-back securities, and not these innovative security products.

  49. skek

    I’m probably using the wrong term so let me try to phrase it better. My view on Shady Canyon is that the location is unremarkable yet TIC decided to promote it as one of the most expensive neighborhoods in all of Orange County and far and away the most expensive neighborhood without ocean views. (Recall that the original plan for Shady was higher density housing and less open space.) Other than big lots and big houses, does it really justify a $4-10 million price tag? You don’t even get a membership to the golf club with your home there. Once the kool-aid dried up, what’s left for Shady Canyon? Why would a captain of industry, movie star, shiek or professional athlete buy there now when they could go to Crystal Cove, CdM, Newport Coast, etc. Just seems like the prices in Shady Canyon were 25% construction costs, 25% land value and 50% marketing hype and irrational exuberance.

    I think the market bears this out. Look at “for sale” vs. sold in Shady. Lots of Villas and customs for sale. Not much selling. 3 Redbird finally sold for $3.1 — it previously sold at the peak for $4.2. That’s a 25% decline in about a year. And the knife catchers in that niche are few and far between. Now prices on everything else have come down to that level, but still nothing moves.

  50. lendingmaestro

    Intrinsic value to me is the cost of construction. Anything above that is a premium.

  51. CapitalismWorks

    Shady Canyon in a great development. And, for those of you who believe $1000/sq ft. in Shady is ludicrous, and those same people will move to the beach, take a look at the $3000+/sq.ft. prices in Emerald Bay and Irvine Cove.

    Though Shady Canyon along with the high-end coastal developments compete for the Very High Net Worth crowd, they are two difference value propositions.

    Shady does offer some advantages

    1) Warmer weather/more sun. Believe it or not, there are people who don’t like the fog and overcast skies every morning on the coast.

    2) Private Golf Course, with extremely limited membership (exclusivity)]

    3) Closer proximity to airports, freeways, employment etc. Gettting anywhere from South Laguna (particularly in summer) can be a nightmare.

    4) Bigger lots. There is something to be said for having land.

    5) Beautiful asthetics. The beach is always beautiful, but the developers of Shady did an top-notch job. If you like desert landscape (and I do), I can’t think of a better development (perhaps Rancho Santa Fe)

  52. fencewalker

    I’ve peaked at this unit. The square footage and location are nice, but it comes at the cost of privacy. The back-end of the unit opens onto a shared lawn area, which is nice if you have kids. However, with the shared lawn area are shared views into the windows and sliders of neighboring units. Also, the front bedroom’s deck immediately fronts the street.

    Yes, the HOA on this property is ridiculous!

    A friend of mine rents an almost identical unit (but much more private) for $2550.

  53. skek

    I’m not saying it’s a ghetto, it is a very beautiful neighborhood and I love the open spaces. But it was and still is grossly over priced — probably more so than any other neighborhood.

    In my opinion, Shady is coming down another 10-20%. It will decline 40-50% from peak, much more than anything in Newport Coast/Crystal Cove.

    If you disagree, how do you explain the inventory pileup there? Nothing is moving in Shady. Potential Shady buyers aren’t subject to the same financing squeeze as entry level buyers. If they wanted to buy in Shady at those prices, they could today and they’ve got dozens of properties to choose from.

    Emerald Bay and Irvine Cove are amazing. Unique in all of Orange County, those two neighborhoods seem to be immune to the price declines.

  54. Eric U.

    there is a Realtor with a blog that insists short sales are a scam by the bank to get the homeowner to keep making payments. This story seems to back that up

  55. zoiks

    “I have no access to MLS zoiky”

    An RE shill with no MLS access? (scratches head) Weird.

    Well, it would still be nice for you to tell us where your made up sales figures are coming from then. Oh that’s right, they’re made up, nevermind. If you happen to come across some non-made up numbers, let us know. Specifically, MLS listings that complete escrow in Feb.

    Closest thing I can find is the “closed sales” given by the market reports from Charles Mansur gives 62 for February. Nicole Thome gives 65. Notably, Nicole Thome also says that “There were 180 homes in escrow in Irvine in Feb.” Wow, that sounds like the bogus numbers you’ve been giving on this board! How interesting!

    Not only that, but Mansur reports that Feb closed sales were way down from Jan (and December). According to him, Jan and December closed sales in the 80’s.

    Notably, Nicole spouts off obviously bogus stats like “Inventory in Irvine is at its lowest level in 12 months”. I’d ask how she arrives at that, but I already know the answer. She’s fudging.

    So along comes ipoopREshill and makes claims like sales in February were UP from January, and crap like there’s 7.5 months, no scratch that, maybe it’s only 6 months of inventory in Irvine. Yeah, well why don’t you explain these stats, where they come from, and what they represent. It’s easy to just pick a shill buddy and borrow numbers from them that you don’t understand. You think if you quoted calculations from Gary Watts anyone would believe you? They wouldn’t.

    And you can quit the “oh gee, zoiky, maybe you just can’t afford Irvine prices” shtick. It got old the last couple of times you did that. And if you were paying attention, you’d know that’s not an issue.

    Pulling these shills out into the sunshine is nasty. They bite you know. I gotta wear gloves.

  56. no_vaseline

    IPO participates on the forum. He’s pretty far from a RE shill. He is a self proclaimed knife catcher in waiting. I disagree with his view of the current market conditions, but I find your words aimed at him to be, um, inapproprate.

    In other words, you can stop being a douche to him anytime.

  57. ipoplaya

    So you are calling me an RE shill and then quoting realtors for your sales figure? Real compelling zoiky…

    I am looking at DQ numbers, not the posts of Roger the Realtor.

    Have a gander:

    Uh oh, 142 sales in Irvine zips for the 22 business day period ended 2/22. January had 135 total in 22 business days… Last time I checked, more sales over the same number of days would mean “more sales”…

    Your rantings that everyone is lying and that all the data except what is in zoiky’s mind is false are getting old and less believable by the post. You ignore links to data, analysis, etc., cry about wanting hard numbers, and yet, never supply any of your own. Please tell me you have more than “Rick the Realtor said so”…

  58. patientrenter

    Capitalism does, in a way, encourage morality, in the sense that it encourages a fair match between payments and reward. Most of the historic inflation in home prices was caused by non-capitalist forces: Special tax deductions for home mortgage interest; tax exemption for the first $500K of home price gains; guaranteed repayment by taxpayers of money investors lend for home mortgages through Fannie Mae and Freddie Mac and FHA…..

    You could argue that the whole deterioration in lending standards in the last few years was driven by the govt guarantees given to the GSEs. Those guarantees are very valuable, and the only way other lenders could gain market share against the GSEs was by creating a new market for people who didn’t qualify for the GSE loans.

  59. Genius

    Capitalism isn’t at fault for the current mess. It would, however, correct it if the gov’t and FED would quit interfering.

  60. cyberpunk

    In America, we praise these people as genius “opportunists” and give them the citizen of the year award.

    No we elect them president.

  61. rkp

    Zoiks – sales are happening whether we like it or not. I don’t get what your beef is with IPO. If you check the forums, you can see he links to his sources.

    I think we all share the general same view that prices are too high but there are people buying out there and no matter how much you disagree, the sales are happening. I would think that our goal should be to understand whats driving the market not and if it is sustainable or just a random pop.

  62. Lost Cause

    If people need zero down to buy a property, the propery probably has no intrinsic value. If nobody is buying it, then there is no intrinsic value.

  63. ice weasel

    In this specific case Genius I would agree with you. Capitalism, unfettered by outside intervention would correct the market. But don’t ignore the elephant in the room which is that clearly it was a lack of regulation that help foster this bubble. In a regulated market we wouldn’t have had the gross fee taking with no eye to whether or not the loans were recoupable. Capitalism a double-edged sword and one that is very, very sharp.

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